Banking on new software

Edward Iwata, OF THE EXAMINER STAFF

Published 4:00 am, Friday, September 15, 1995

The public debut of Intuit Inc.'s new home-banking software - the popular Quicken personal-finance programs - will create sharp competition among banks and keep prices low in the market, analysts say..

Investors seemed to agree with Intuit executives who believe that cyber-banking by personal computers will revolutionize the financial service industry.

Intuit stock climbed 3-1/2, or 9 percent, to 47 on Nasdaq trading Thursday of 1 million shares - nearly three times the average daily volume. It gave up some of that gain Friday, dropping " to 46-1/2 at midday.

Industry experts said most banks will at first absorb most of the costs for home banking by personal computer. Others may charge $10 to $15 a month.

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"People want to experiment before they pay for the service," said Phoebe Simpson, an on-line financial analyst at Jupiter Communications, a New York-based technology publisher and research firm.

Already, two banks - San Francisco-based Union Bank and Corestates Financial Corp. in Pittsburgh, Pa. - have said they will initially offer their home banking products at no charge.

Union Bank officials said they hope to attract as many as 20,000 new customers over the next year.

"Our phones are ringing like crazy," said Frank Han, Union Bank's vice president of interactive markets.

"The demand is very real. Customers want it right now."

Banks and software companies, such as Intuit and giant Microsoft Corp. of Redmond, Wash., hope to capitalize on the promising market of cyberbanking.

They'll face plenty of competition from brokerages and mutual fund companies, said William Bluestein, a market analyst at Forrester Research Inc.

Analysts said Intuit's Quicken leads the pack, with 7 million to 8 million users. Microsoft's home-banking software, Money, has 1.5 million users.

The new Quicken program could attract 1 million new customers to Intuit, said David Farina, an analyst at William Blair & Co.

"Intuit has 8 million (users) - about 40 percent will upgrade," Farina said. "Add 1 million new users. That's big bucks for Intuit."

While electronic billing has been around for years, consumers have backed away from the services because of high fees and mistrust of the technology.

"The technology is there, but will people use it?" Simpson said. "Trust is a big issue."

But Intuit executives, speaking at a Thursday news conference in New York City, said Quicken is affordable and easy to use.

Intuit's partnerships with 19 major banks and financial institutions - from Wells Fargo to Citibank to American Express - will reassure customers, Intuit executives said.

"Consumers want to do business with institutions they trust over a secure environment," said Scott Cook, Intuit chairman.

Intuit said that "Quicken for '96" and "Quicken Deluxe for '96," new versions of its popular home banking software, will reach retail stores Oct. 26. The programs will sell for $39 and $59 each.

The new software will include features for financial planning and investments, paying bills, accessing bank accounts and transferring funds between accounts.

People also will be able to customize their personal finances. For instance, users can break down their monthly costs for child care or other family expenses. Or investors using a new program, Investor Insight, can create daily reports on their stock holdings.&lt;